Question 1

The exclusive right to use a certain name or symbol is called a:

Accepted Answer

A) franchise. 
B) patent. 
C) trademark. 
D) copyright. 
A) franchise. 
B) patent. 
C) trademark. 
D) copyright.

Question 2

Depreciable cost is computed as:

Accepted Answer

A) cost less accumulated depreciation. 
B) book value less residual value. 
C) cost less residual value. 
D) market value less residual value. 
A) cost less accumulated depreciation. 
B) book value less residual value. 
C) cost less residual value. 
D) market value less residual value.

Question 3

Which of the following is not an intangible asset?

Accepted Answer

A) Goodwill 
B) Trademark 
C) Copyright 
D) Long-term receivable 
A) Goodwill 
B) Trademark 
C) Copyright 
D) Long-term receivable

Question 4

BlueInk Roadways Corporation operates throughout the United States.The following data (in millions)were adapted from recent financial statements of BlueInk.

Accepted Answer

A) 2.08 
B) 1.02 
C) 2.01 
D) 2.10 
A) 2.08 
B) 1.02 
C) 2.01 
D) 2.10

Question 5

Which of the following is considered under the straight-line method but not under double-declining-balance method?

Accepted Answer

A) The asset's book value 
B) The asset's salvage value 
C) The asset's expected useful life 
D) The asset's initial cost 
A) The asset's book value 
B) The asset's salvage value 
C) The asset's expected useful life 
D) The asset's initial cost

Question 6

A company acquired a truck for $79,000 at the beginning of the fiscal year.It has a useful life of 5 years and a residual value of $9,000.The company uses the straight-line method of depreciation.After owning the truck for two years,the company sold it for $34,000.
(a)Determine depreciation expense for each of the first two years,and 
(b)determine the gain or loss resulting from the sale.

Accepted Answer

(a)$14,000 each year

Question 7

A company sold a delivery truck for $22,000 cash.The truck costs $45,800 and had accumulated depreciation of $32,000 as of the date of sale.The entry to record the sale would include:

Accepted Answer

A) an increase in accumulated depreciation for $32,000. 
B) a total decrease in delivery truck for $13,800. 
C) a gain for $8,200. 
D) a loss for $10,000. 
A) an increase in accumulated depreciation for $32,000. 
B) a total decrease in delivery truck for $13,800. 
C) a gain for $8,200. 
D) a loss for $10,000.

Question 8

The total depreciation across the years of an asset's life is the same under the double­declining­balance method or the straight-line method.

Accepted Answer

A) True 
 B)False

Question 9

If a fixed asset with an original cost of $18,000 and accumulated depreciation of $2,000 is sold for $15,000,the company must:

Accepted Answer

A) recognize a loss on the income statement under other expenses. 
B) recognize a loss on the income statement under operating expenses. 
C) recognize a gain on the income statement under other revenues. 
D) recognize a gain on the income statement under revenues. 
A) recognize a loss on the income statement under other expenses. 
B) recognize a loss on the income statement under operating expenses. 
C) recognize a gain on the income statement under other revenues. 
D) recognize a gain on the income statement under revenues.

Question 10

Which method of depreciation considers residual value in computing the normal periodic depreciation?

Accepted Answer

A) Straight-line 
B) MACRS 
C) Double-declining-balance 
D) Accelerated 
A) Straight-line 
B) MACRS 
C) Double-declining-balance 
D) Accelerated

Question 11

Expenditures that add to the utility of fixed assets for more than one accounting period are called:

Accepted Answer

A) committed expenditures. 
B) revenue expenditures. 
C) current expenditures. 
D) capital expenditures. 
A) committed expenditures. 
B) revenue expenditures. 
C) current expenditures. 
D) capital expenditures.

Question 12

During 2015,Lexie,Inc.acquired Lena,Inc.for $10,000,000.The fair market value of the net assets of Lena,Inc.was $8,500,000 on the date of purchase.During 2018,Lexie,Inc.determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.

Accepted Answer

(a)$10,000,000 - $8,500,000 = $1,500,000

Question 13

Physical depreciation occurs when changes in customer needs causes a fixed asset to no longer provide services for which it was intended.

Accepted Answer

A) True 
 B)False

Question 14

The depreciation calculated using Modified Accelerated Cost Recovery System is primarily used for:

Accepted Answer

A) financial statement reporting by large companies. 
B) income tax purposes. 
C) financial statement reporting by small companies. 
D) comparing the performance of two companies in the same industry. 
A) financial statement reporting by large companies. 
B) income tax purposes. 
C) financial statement reporting by small companies. 
D) comparing the performance of two companies in the same industry.

Question 15

The cost of a patent should be amortized :

Accepted Answer

A) over 10 years. 
B) over its economic life. 
C) over 20 years or its economic life,whichever is shorter. 
D) only if an impairment occurs. 
A) over 10 years. 
B) over its economic life. 
C) over 20 years or its economic life,whichever is shorter. 
D) only if an impairment occurs.

Question 16

Depletion is the process of transferring the cost of intangible assets to an expense account.

Accepted Answer

A) True 
 B)False

Question 17

Goodwill refers to the excess of purchase price of a business over the fair value of its net assets.

Accepted Answer

A) True 
 B)False

Question 18

Expenditures for research and development are generally recorded as:

Accepted Answer

A) current operating expenses. 
B) assets,and amortized over their estimated useful life. 
C) assets,and usually amortized over 40 years. 
D) current assets. 
A) current operating expenses. 
B) assets,and amortized over their estimated useful life. 
C) assets,and usually amortized over 40 years. 
D) current assets.

Question 19

An equipment was purchased for $15,000.It has a useful life of 5 years and a residual value of $4,000.Determine the depreciation expense for the first year using the double-declining-balance method?

Accepted Answer

A) $5,400 
B) $6,000 
C) $2,200 
D) $2,600 
A) $5,400 
B) $6,000 
C) $2,200 
D) $2,600

Question 20

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called:

Accepted Answer

A) depletion. 
B) deferral. 
C) amortization. 
D) depreciation. 
A) depletion. 
B) deferral. 
C) amortization. 
D) depreciation.

The exclusive right to use a certain name or symbol is called a:

Depreciable cost is computed as:

Which of the following is not an intangible asset?

BlueInk Roadways Corporation operates throughout the United States.The following data (in millions)were adapted from recent financial statements of BlueInk.

Which of the following is considered under the straight-line method but not under double-declining-balance method?

A company sold a delivery truck for $22,000 cash.The truck costs $45,800 and had accumulated depreciation of $32,000 as of the date of sale.The entry to record the sale would include:

The total depreciation across the years of an asset's life is the same under the doubledecliningbalance method or the straight-line method.

If a fixed asset with an original cost of $18,000 and accumulated depreciation of $2,000 is sold for $15,000,the company must:

Which method of depreciation considers residual value in computing the normal periodic depreciation?

Expenditures that add to the utility of fixed assets for more than one accounting period are called:

During 2015,Lexie,Inc.acquired Lena,Inc.for $10,000,000.The fair market value of the net assets of Lena,Inc.was $8,500,000 on the date of purchase.During 2018,Lexie,Inc.determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.

Physical depreciation occurs when changes in customer needs causes a fixed asset to no longer provide services for which it was intended.

The depreciation calculated using Modified Accelerated Cost Recovery System is primarily used for:

The cost of a patent should be amortized :

Depletion is the process of transferring the cost of intangible assets to an expense account.

Goodwill refers to the excess of purchase price of a business over the fair value of its net assets.

Expenditures for research and development are generally recorded as:

An equipment was purchased for $15,000.It has a useful life of 5 years and a residual value of $4,000.Determine the depreciation expense for the first year using the double-declining-balance method?

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called:

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 7: Fixed Assets and Intangible Assets

The exclusive right to use a certain name or symbol is called a:

Depreciable cost is computed as:

Which of the following is not an intangible asset?

BlueInk Roadways Corporation operates throughout the United States.The following data (in millions)were adapted from recent financial statements of BlueInk.

Which of the following is considered under the straight-line method but not under double-declining-balance method?

A company sold a delivery truck for $22,000 cash.The truck costs $45,800 and had accumulated depreciation of $32,000 as of the date of sale.The entry to record the sale would include:

The total depreciation across the years of an asset's life is the same under the double­declining­balance method or the straight-line method.

If a fixed asset with an original cost of $18,000 and accumulated depreciation of $2,000 is sold for $15,000,the company must:

Which method of depreciation considers residual value in computing the normal periodic depreciation?

Expenditures that add to the utility of fixed assets for more than one accounting period are called:

During 2015,Lexie,Inc.acquired Lena,Inc.for $10,000,000.The fair market value of the net assets of Lena,Inc.was $8,500,000 on the date of purchase.During 2018,Lexie,Inc.determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.

Physical depreciation occurs when changes in customer needs causes a fixed asset to no longer provide services for which it was intended.

The depreciation calculated using Modified Accelerated Cost Recovery System is primarily used for:

The cost of a patent should be amortized :

Depletion is the process of transferring the cost of intangible assets to an expense account.

Goodwill refers to the excess of purchase price of a business over the fair value of its net assets.

Expenditures for research and development are generally recorded as:

An equipment was purchased for $15,000.It has a useful life of 5 years and a residual value of $4,000.Determine the depreciation expense for the first year using the double-declining-balance method?

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called:

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

The total depreciation across the years of an asset's life is the same under the doubledecliningbalance method or the straight-line method.